An analysis by the “Süddeutsche Zeitung”, utilizing monthly reports from the Federal Ministry of Finance, indicates that the new social assistance system, which has been in effect since July, is not alleviating pressure on the federal budget.
The costs for basic security, including housing rent, show little change compared to the previous year. In July, the cost amounted to 3.5 billion euros, mirroring the figures from the 2025 prior year. In August, expenses were 3.4 billion euros, down marginally from the 3.5 billion recorded the previous year. In September, the cost stood at 3.3 billion euros, just below the 3.4 billion registered in the corresponding month of 2025. Even in the first half of the year, before the reform was implemented, these fluctuations remained minimal.
Experts are not surprised by the lack of significant financial relief, a reality highlighted by Andreas Peichl of the Ifo Institute. The Union had promised during the election campaign that the reforms to the Bürgergeld (citizen income benefit) would result in billions of euros in savings. Peichl suggests that the promise had generated expectations that the actual reform could not meet, which ultimately undermines the overall credibility of social reforms.
The new basic security rules primarily intensify sanctions. Peichl points out that to achieve any discernible savings, at least one million long-term unemployed people would need to find work-a condition that, in itself, does not create a right to sanctions. He argues that most benefit recipients are not actually unemployed, but rather children, recipients receiving supplemental payments, single parents, or individuals engaged in job market development programs or training.
It is worth noting that expenditure on basic security has been declining slightly regardless of the reform. This trend is attributed to the increasing employment rate among Ukrainian refugees and a decrease in the arrival of new asylum seekers. However, experts caution that if industries continue to lose jobs, basic security costs could increase again in the future.
